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Health insurance premiums for California families rose 153% since 2002, more than five times the 29% increase in the rate of inflation, according to a new survey released recently.
“A 153% increase in health insurance premiums in just 10 years is unbearable, and the fact that premiums have risen five times the rate of inflation is scandalous,” said Carmen Balber of Consumer Watchdog, a nonprofit, nonpartisan organization. “Californians are paying for 7-digit executive salaries, insurance company waste, and excessive profits with these sky-high premiums. Insurers should have to prove why they want rate hikes in public, and Californians should have the power to block rate increases that can’t be justified.”
The survey was conducted by the California HealthCare Foundation.
In November, Consumer Watchdog filed a ballot initiative that would require health insurance companies to publicly justify and get rates approved before they take effect. Health insurance companies in California may currently raise rates to any level with no approval. No one has the power to block a rate hike, even if it is found to be unreasonable or excessive. The ballot initiative gives the state insurance commissioner the power to reject excessive or unreasonable rates.
The CHCF survey found that annual premiums were higher in California than nationally for individual coverage ($5,970 versus $5,429) and family coverage ($15,724 versus $15,073). Thirty-five states have some authority to approve or reject health insurance rate increases, while California has none.
The proposed ballot initiative, known as the “Insurance Rate Public Justification and Accountability Act,” would:
The initiative also requires insurance companies to justify rates in relation to proposed changes to patient out-of-pocket expenses, including deductibles and co-pays. The CHCF survey found that copayments for office visits increased substantially since 2007, the number of workers in small firms with high deductibles more than tripled since 2006, and annual out-of-pocket limits grew significantly since 2005.
The measure will be cleared to circulate for signature-gathering this month.